Lexus finance PCP - affordability checks

feyaz

Hi all,

I just wanted some advice on affordability checks.

I bought a Lexus about 18 months ago, I took out a PCP. During the application process, I remember seeing a screen that the guy at Lexus showed me where they had entered my salary and some affordability questions - I remember at that point saying "where did you get that from" he replied, "you wouldn't be buying a Lexus if you couldn't afford it".

I've gone through all my paperwork and requested paperwork from them, however, nothing asks about affordability details. They obviously can't provide this for whatever reason - are they in breach of the consumer credit act?

The whole process of buying and owning a Lexus is not what everyone says it is. The car is a hybrid and awful on fuel, the servicing is horrendously expensive and the value of the vehicle leaves it in negative equity - which is why affordability is so important to me. The final payment is based on the future value of the car which is also wrong. It just feels like they'll do anything to sell you car including lie on affordability checks then wash their hands of you.

What can I do? Are they in breach? what process should I follow?

StopIt

Simply put, no, they aren't in breach of anything.


Nearly all loans, or financing will have affordability checks as part of the approval process. The paperwork you get is post this process so of course will not mention it. If you had failed it, you would not have got the car. However, as they have security on the finance (The car itself) affordability checks aren't as strict as say a personal loan with no collateral. If you're saying the dealer cheated the system and you should have failed the affordability check, then that's a specific allegation. One that likely won't fly as frankly, if you didn't think you could afford the car, why did you go to PCP it?


As for your complaints? Well, caveat emptor I'm afraid. If you're asking if car dealerships do anything to sell your their cars well, the answer "Does the Pope..." applies.


Luxury cars are always in danger of negative equity bought new as some drop dramatically drop in value. Others don't. Again it's all about research before buying. On a PCP there should be a minimum future value, but why is your value wrong?


Finally, did you buy a Lexus based on what "other people" said? I mean, you know they're basically a better badged Toyota?

foxy-stoat

PCP deals are designed for you to drive a car that you cannot afford. If you paid a small deposit and minimum monthly payments then you will always be in negative equity, but its not a worry as at the end of the term you just hand the car back and walk away.


If you cannot afford the car then find out your half way point and VT it, its probably near the end of the agreement though unless you dropped a large deposit at the start.

meer53

The time to question affordability was before you signed the agreement to buy the car. Not 18 months later. They aren't in breach of anything, check your contract to see how soon you can hand the car back.

[Deleted User]

Having an engine and electric drivetrain is heavy so not brilliant for economy in some circumstances

feyaz

foxy-stoat wrote: »

PCP deals are designed for you to drive a car that you cannot afford. If you paid a small deposit and minimum monthly payments then you will always be in negative equity, but its not a worry as at the end of the term you just hand the car back and walk away.


If you cannot afford the car then find out your half way point and VT it, its probably near the end of the agreement though unless you dropped a large deposit at the start.

I can afford it, that is not an issue I just don't think they should be doing it and my question is - is it illegal for them to make !!!! up to get approvals?

feyaz

StopIt wrote: »

Finally, did you buy a Lexus based on what "other people" said? I mean, you know they're basically a better badged Toyota?

I thought I'd buy a highly recommended brand, a sensible car! It is a Toyota, I should've stayed clear of a company that also makes sewing machines. Never again!

foxy-stoat

feyaz wrote: »

I can afford it, that is not an issue I just don't think they should be doing it and my question is - is it illegal for them to make !!!! up to get approvals?

If you can afford the repayments now and when you started then what have they made up?


Assuming they asked you your salary and credit commitments, number of dependants etc etc 18 months ago. What has changed, apart from you driving the car for 18 months and realised its not for you.


I do not think the salesperson has broken the law in selling you PCP deal on a car you can afford.


Your comment on negative equity and affordability isn't really an issue, at the end of the 3 or 4 year deal you have options, make the balloon payment and keep the car (assuming its worth more than the projected value at the end) so you can either keep it, sell it and make a profit or use the car to part exchange on the next vehicle or if its worth less than the balloon payment just hand it back.


As this is only 18 months old then your only costs are routine servicing, prices would of been available at the dealers, consumables like brake pads and discs would be expensive at the dealers but cheaper going to independents and you can look up the price of tyres fairly easily - anything major or warranty items wouldn't cost you anything.


So its just the to economy your not happy with, every manufacturer's mpg figures need to be taken with a pinch or bucket of salt, but the single most effect you can have on economy is your right foot - my Wife only gets 19 mpg out of our RX300, I usually get at least 25 mpg when I drive it.


Good luck with your Lexus, we love ours but its an old one.

[Deleted User]

foxy-stoat wrote: »

PCP deals are designed for you to drive a car that you cannot afford.

Complete and utter rubbish. I guess you pay cash for everything, including your house, and never buy anything new as second hand is just as good :think:

Nebulous2

What you've described applies to many (most?) new cars. Buying something which costs 30 grand and will struggle to be worth half of that in 3 years means it will cost you £5k a year in depreciation alone before other costs.

PCP is structured to make that more palatable to people by making the monthly payment look more affordable. It has its own specific problems though by deferring a lot of the cost with a balloon payment whilst often charging higher interest than a personal loan would.

An expensive lesson for you but not an unusual one. All those costs need to be paid regardless of how the finance is structured.

misiek404

camelot1971 wrote: »

Complete and utter rubbish. I guess you pay cash for everything, including your house, and never buy anything new as second hand is just as good :think:

You're confusing PCP with HP